Why the Swiss AHV equalization fund, together with the saved pension assets, is coming under the
control of an American custodian bank, i.e. asset manager.
Similar to Germany, the monthly pension payments to Swiss pensioners are paid by the Old Age and
Survivors' Insurance (AHV) on a pay-as-you-go basis.
This means that current pension payments are made from the monthly contributions of the working population.
Unlike Germany, however, Switzerland still has a bulging AHV/IV/EO equalization fund
with assets of around 40 billion Swiss francs.
This money belongs to the population and serves as a kind of nest egg for ongoing pension payments for a total of one year.
This money is managed by "Compenswiss", a supposedly independent federal public institution founded in 2017 and based in Geneva.
This "Compenswiss" therefore not only monitors the monthly pension payments to the pensioners entitled to receive them,
but also manages the compensation fund with the 40 billion.
Of course, this money is not stored in some vault, but is invested in securities in accordance with regulations, and
"Compenswiss" requires a custodian bank to hold these securities.
The custodian for these 40 billion in securities was previously the major Swiss bank UBS. But that is history.
Following an invitation to tender, Compenswiss decided that these 40 billion AHV assets should no longer be managed
by a Swiss bank, but by a German subsidiary of the American State Street Bank headquartered in Boston.
"Together with BlackRock and Vanguard, State Street is one of the largest asset managers in the world,
and their size alone gives them immeasurable power.
But this entails massive risks for Switzerland and pensioners' money.
This was a headline in the "NZZ" (Neue Zürcher Zeitung) on October 7, 2024:
"The interests of the US and Switzerland are not always congruent. When banking secrecy was abolished, for
example, we saw how hard the Americans pushed through their interests in cases of doubt," says Matter.
"In extreme cases, the custodian bank could refuse to deliver securities. If an emergency arises, the Federal
Council has better options for action with a Swiss bank."
Compenswiss has now felt compelled to minimize this risk and issued a press release on October 11.
Compenswiss" writes in the NZZ, among other things:
"The risk of the US authorities freezing the assets was analyzed by Compenswiss as part of the tender.
The occurrence of this risk was classified as highly unlikely." Is that true?
Banking law professor Dr. Rolf Sethe from the University of Zurich doubts this:
"Yes, in extreme cases the USA could have access to the AHV, IV and EO compensation funds via State Street. This
is because 'State Street' holds the financial instruments of the compensation funds in custody.
If you want to withdraw them from the custody account, you have to instruct 'State Street' to transfer them to a
custody account at another custodian bank," says banking law professor Rolf Sethe from the University of Zurich.
"This means that AHV cannot withdraw the assets without the involvement of 'State Street' as the custodian bank.
This applies regardless of where the financial instruments are physically stored.
As a US bank, 'State Street' is subject to US law. If the US government were to impose sanctions on Switzerland, the
bank would be forced to comply with them," Sethe continued.
"Since the US regularly enforces its law extraterritorially, it would probably instruct the bank to enforce
the sanctions via its European subsidiaries as well.
'Compenswiss' has the mandate with 'State Street subsidiary' in Munich."
If you look at the behavior of the US administration over the last 50 years, it is not unlikely, but very
likely, that the US will blockade or even steal foreign property in the event of sanctions or disputes.
Switzerland has already had very unpleasant and costly experiences with this.
After the Second World War, the "Washington Agreement" imposed a quarter of a billion francs (an
astronomical sum at the time) in advance payments on Switzerland for non-participation in the war.
In the end, the required payment was reduced by fifty percent.
Although Switzerland never touched so-called "ownerless assets" after the Second World War - never made them
disappear through state confiscation as in other countries - it was forced to pay billions in compensation.
Banking secrecy, which also applies to foreigners, was stolen from Switzerland by financial blackmail through the
threat of exclusion from international payment transactions.
And last but not least, UBS had to take over the ailing Credit Suisse under pressure from the US administration,
thereby creating a powder keg for Swiss taxpayers.
Kla.TV reported on this on 28.4.23 and 24.11.23.
In the recent past, the USA has demonstrated on a grand scale how it deals with the assets of
other states when it imposes sanctions against them.
The US administration imposed sanctions against Russia and used this opportunity to block 260 billion
worldwide belonging to the Russian National Bank.
So the USA has never been squeamish about foreign assets.
So what motivated the banking giant "State Street" to bid for the "Compenswiss" tender and replace UBS as asset manager?
Why was the mandate to manage the AHV assets awarded to a different and now foreign trustee?
What did the old trustee, i.e. UBS, do wrong? What does "State Street" do better?
The annual "custody fee" for a custodian bank is usually between 0.01% and 0.05% of the assets to be managed, depending on the
complexity of the asset management and the contractual details.
With assets of CHF 40 billion, this would be approximately: At 0.01 %: CHF 4 million per year At 0.05 %: CHF 20 million per year
However, State Street Corporation's global revenues amounted to approximately USD 18.36 billion in 2023, with the majority coming
from custodial, asset management and other financial services.
The Swiss and German markets are probably a small part of the overall business, particularly in the
role of custodian bank for institutional assets.
Considering the fact that a grandma has to knit for a long time even for CHF 4 million, the Swiss/German management
of "State Street" certainly celebrated winning this mandate.
As a rule, winning a tender is always duly celebrated, because if it wasn't lucrative, you probably
wouldn't have made the effort to take part in it.
But lucrative does not necessarily mean that you have only achieved a continuous income stream that
should cover your costs; there may also be other reasons.
And of course we would be interested in them as contributors to the AHV.
Should the real motives be that the AHV assets could be blocked under US law on flimsy grounds?
In the midst of these discussions, some politicians are already calling for the national wealth to be
managed independently of major American banks in future.
They are calling for greater control and transparency over how and where the AHV fund's money is invested.
This case affects everyone living in Switzerland. It concerns the money and pensions of all residents.
AHV assets must remain in Switzerland and under Swiss control!
You can lend your voice to this demand with the Schweizerzeit campaign and petition "The AHV assets remain in Switzerland".
The collection period runs until the end of January 2025. You will find the signature
form in the blue info box below this mailing.